The DAX 40 advanced more than 1% to above 25,100 on Friday, rebounding from a near one-month low as investors welcomed strong corporate earnings and better-than-expected PMI data.
Sentiment also improved late in the European session after oil prices retreated on reports that Pakistan was seeking to revive US-Iran peace talks.
Meanwhile, markets continued to assess the impact of new US tariffs imposed on imports from 60 trading partners, including the European Union.
The latest S&P Global survey showed Eurozone business activity returned to growth in July, exceeding expectations, with Germany leading the recovery.
SAP surged 10% after reporting stronger-than-expected quarterly revenue, driven by solid cloud backlog growth and robust demand for its AI platform, while Atoss Software gained almost 10% on strong cloud-related results.
In contrast, Adidas fell 1.5%, and Volkswagen dropped 2.4% after weaker earnings and a lower revenue outlook.
For the week, the German index rose 1.1%.